BLS Analysis for July 2018

Official Implementation of the Bartos RPM Dashboard with The Marshall Plan coaching programs; August 1st, 2018

Starting on August 1st, I will be including Jon Bartos’ RPM Dashboard with all of my coaching programs. This will be merged with my 100-point sheet format. I will be further emphasizing Recruiting Analytics and the Quantum Leap Theorems of the big billers—all of the numbers necessary to run a ‘low risk’ operation.

More details on how to sign-up will be sent to all of you on my distribution list soon.

WHY A COACH?

“Teachers open the door; but you must enter by yourself”—Chinese Proverb

In the opinion of ex-Dallas Cowboys football coach Tom Landry who coached from 1960-1988, “A coach is someone who tells you what you don’t want to hear,who has you see what you don’t want to see,so you can be who you have always known you could be.”

Is now the time to pick a Coach?

I realize that taking that first step to engage a Coach to help you reach a higher level of production is not as easy as it sounds. After all, your training investment – and your time – are important and deserve every consideration. I share your feelings. I believe that how you approach your recruitment career matters…that you should get what you pay for, and then some…that you should enjoy your time with your Coach as you are benefiting from it…and that you should never settle for the ordinary.

So for those of you who have been toying with the idea of working with a recruitment coach, now may be the time. Only you can come to that decision point.

When considering ‘individual change management’, consider this theosophical proverb: “When the student is ready, the teacher will appear!”

“Bob Marshall is a speaker’s speaker and a trainer’s trainer. He has a gift for taking the cornerstones of the business and compelling people and teams to not only hone their skills but to execute. We’ve had Bob engage our teams a number of times over the last few years and our groups always come away more focused on the core and more energized to perform. Come ready to learn because this man knows the business and will make you better!”

—David Alexander, President, Adecco & Soliant, January, 2017

If you are ready to take the first step, you can read descriptions of my coaching plans, and all of my products, on my website @ www.themarshallplan.org. Then, call me directly at 770-898-5550 or email me @ bob@themarshallplan.org.

Preface

Many of you continue to correspond with me about these monthly BLS analyses and have asked if it is OK to use them in your presentations. The answer is, of course, yes! That is why I spend the time to assemble this information. I would encourage any of you who have that desire to weave any of the information I have printed below into your presentations. I write these analyses for the benefit of our recruitment industry in general and for the members of my distribution list in particular. So use this info as you deem appropriate.

I also write these monthly BLS analyses to not only counterbalance the negative/incorrect press reporting of our general economic state but, more than that, to remind all of my recruitment readers that, at the level we work, there is no unemployment and so we must recruit to find the candidates our client companies so desperately need!

So, to my recruiter colleagues, get out there and do what your name implies…RECRUIT! When your client companies have unique and difficult positions to fill, they need you. When they are being picky, they need you. When they are longing for more production from fewer employees, they need you. Go fill those needs. These should be the halcyon days in the recruitment arena!

Finally, always remember that we are not in an HR business, but in a ‘circumventing the time factor in the hiring sequence’ business—and adding value to our client companies.

Wages for US Workers Increase 3% Year Over Year: ADP

Daily News, July 25, 2018

Wages for US workers increased 3.0% over the last year, raising the average wage level by 80 cents to $27.46 an hour, according to the ADP “Workforce Vitality Report, released today. This marks an uptick from the 2.3% growth a year ago and is consistent with a tightening labor market, according to the report.

“We’re seeing interesting shifts in labor-market dynamics this quarter,” said Ahu Yildirmaz, co-head of the ADP Research Institute.

Employment growth for new entrants edged down by 0.1%, while it has increased by 4.5% for those age 55 and older. In addition, job switchers who are 55 and older are seeing wage growth of 6.3%, which is 1.5% higher than the prime workforce group who are ages 35 to 54.

“This shift suggests employers are searching far-and-wide for skilled talent and workers who were once sitting on the sidelines have begun to return to the labor market in response,” Yildirmaz said.

The information industry continued to lead increases for both wage level and wage growth; in the sector overall, wages increased 5.5% to $41.77. New entrants into the information field had 6.8% wage growth, while workers who successfully switched positions to the information industry had wage growth of 9.4%.

On the flip side, wages in the resources and mining industry fell 3.7% to $33.84.

Benefit of Counsel: Beware the No-Poaching Pact

Dan M. Forman, July 24, 2018

The US Department of Justice has put all employers on notice: Agreements among competitors not to hire each other’s employees or otherwise limit wages or benefits — “anti-poaching agreements” — are not allowed. And as staffing professionals frequently engage with competitors in the normal course of business, the Department of Justice may hold staffing firms to the scrutiny of criminal proceedings.

In October 2016, the department and the Federal Trade Commission published guidance advising employers — and, specifically, professionals that support employers — against entering into formal or informal “non-poaching” agreements. In announcing the settlement of an anti-poaching case earlier this year, USA v. Knorr-Bremse AG and Westinghouse Air Brake Technologies Corp., the Department of Justice warned subsequent investigations would likely include a criminal component. (The Knorr-Bremse case did not include criminal charges because the anti-poaching agreements had stopped before the antitrust guidance was published.)

Knorr-Bremse is the first federal prosecution and settlement of an antipoaching case since 2010, when the Department of Justice pursued and resolved the “Hi Tech” anti-poaching cases against Adobe, Apple, Google, Pixar, Intel and Intuit. Shortly after settlements with the federal government, a class-action civil case commenced against the same defendants, alleging violations of California’s antitrust statute and right-to-compete laws. The civil class action resulted in $400,000,000 paid in settlements to the certified class of 65,000 employees and the attorneys. Suffice it to say, a lot of money is at stake.

Staffing professionals need to be aware that their customers do not use staffing firms to engage in activities that the department might classify as antipoaching. Staffing firms need to be vigilant to inferences or possible evidence of potential anti-poaching agreements because email, conversations and other inferences — not necessarily formal written agreements detailing antipoaching behavior — may form the basis for prosecution.

The Department of Justice warns against:

Discussions or agreements limiting compensation and/or benefits to those of competitors in the same industry.

Conversations or emails where companies agree not to solicit or hire each other’s employees.

Exchanges of compensation, benefit employment or recruitment strategies with other employers in the same industry.

To better secure themselves from claims of anti-poaching — whether with their competitors or due to the follies of their clients — staffing firms should:

Consult with counsel about an antitrust audit as soon as any issues or concerns are identified.

Moreover, staffing firms may want to take advantage of the “amnesty” program offered by the Department of Justice should they become privy to information about anti-poaching agreements as the government offers to protect reporters from criminal prosecution, fines and jail time.

A failure to comply with all antitrust laws, including the bar on anti-poaching, will more likely invoke the significant disruption, costs and scrutiny of civil and criminal prosecution. Therefore, if you encounter any suggestion, communication or direction that arises as part of an industry meeting or conference, internally, from a representative of a competitor or otherwise, you should seek advice from in-house or outside counsel immediately.

Counteroffers A Stop-gap Retention Strategy

Daily News, July 18, 2018

Staff members who accept counteroffers typically leave the company in less than 2 years anyway, according to a survey by Robert Half International Inc.

Many companies are offering higher salaries to keep workers who state they plan to quit for a better job opportunity, but the research suggest this method serves only as a stop-gap retention strategy for employers and isn’t a long-term career solution for employees.

“Counteroffers are typically a knee-jerk reaction to broader staffing issues,” said Paul McDonald, senior executive director for Robert Half. “While they may seem like a quick fix for employers, the solution is often temporary. When employees accept a counteroffer, they will likely quit soon afterward.”

The research found 58% of senior managers across a variety of professional fields — including finance and accounting, technology, legal, marketing and advertising, and human resources — extend counteroffers to keep employees from leaving for another job. The primary reasons leaders said they extend counteroffers are to prevent the loss of an employee’s institutional knowledge and to avoid spending time or money hiring a replacement.

The senior managers were also asked, “On average, how long do employees who accept counteroffers remain with your company?” The mean response was 1.7 years.

In a blog post discussing the survey, Robert Half provided 5 reasons making a counteroffer is counterproductive:

A salary counteroffer isn’t a long-term remedy

It can have a negative ripple effect

A counteroffer can cause a dip in morale

It could cause a rift in trust

Counteroffers don’t improve employee performance

The online survey was developed by Robert Half and conducted by an independent research firm. vIt includes responses from more than 5,500 hiring decision makers in the US across a variety of professional fields.

3 Questions to Evaluate a Candidate’s Emotional Intelligence

Kellie Brown, June 27, 2018

When looking to fill an open position, a lot of factors go into the screening process for the perfect candidate. You want someone who has relevant experience; an acceptable number of years in the field; a solid work history; and, the skills you’re looking for. But the most often overlooked, and arguably most important, factor you should be looking for is emotional intelligence.

Emotional intelligence, a term coined by Daniel Goleman, involves self-awareness, self-regulation, motivation, empathy, and social skill.

This innate ability has proven to be connected to success in the workplace. In fact, one study found that people who were strongest in emotional intelligence were more likely to succeed in a position than those who were strongest in IQ or relevant previous experience. Add to that the fact that job retention has also been linked to emotional intelligence — and you have a pretty strong case as to why you should be altering your screening process to incorporate Emotional Intelligence indicators. To help assess Emotional Intelligence during the screening process, we’ve gathered three questions you should incorporate and what you should be looking for in a candidate’s responses.

Can you explain to me a conflict you had at work that left you feeling aggravated?

Handling work conflict can be aggravating, but it’s how an individual handles the emotion at hand that makes all the difference. When asking this question, you want to be listening for how a candidate handled their emotions during this trying situation and how they were able to empathize with those they were conflicting with.

As mentioned, take into consideration the five factors of emotional intelligence Daniel Gorman laid out and look at how they understood and handled their own emotions, whether or not they seemed aware of others’ emotions, and whether or not they were able to work through the conflict and still have a relationship with those involved.

Tell me about a time your boss or colleague criticized your work. How did it make you feel and how did you handle it?

An emotionally intelligent person understands that criticism about work is not personal and will use the feedback to positively impact their future work. You should listen for a candidate who sounds defensive or offended when speaking about the feedback or tries to assign blame, as all of these are indicators of lower emotional intelligence.

Assess the way they’re talking about the situation. Do they still seem upset? Can they articulate how they were able to incorporate the feedback to improve upon themselves? How a candidate talks about a situation is just as important as the story they tell.

What job skill do you feel you could use improvement on?

People low in emotional intelligence have a hard time discussing their faults, so you want to take note of someone who has difficulty answering this question or someone who has a boilerplate answer like, “I’m too much of a perfectionist.” While most often these types of answers aren’t really true, they are also too vague to be of any help in assessing the candidate.

You want to listen for someone who takes the time and effort to be thoughtful and articulate in their answer. Someone high in emotional intelligence will also be more likely to display curiosity and a desire to learn with their response to this question.

Businesses are expanding benefits as the competition for workers intensifies, according to an Express Employment Professionals survey of business leaders released today.

Respondents were asked, “What benefits, not including healthcare, does your company offer employees?”

Responses included the following:

*Casual dress code: 16%

*Access to training/certification classes: 14%

*Flexible work schedule: 9.5%

*College tuition reimbursement: 8%

*Professional organization memberships: 8%

*Community service/volunteer opportunities: 7%

*Profit sharing/stock options: 7%

*Opportunities to work from home/remotely: 6%

*Cafeteria programs: 6%

*Company gym/membership discount at a local gym: 5.5%

*Generous/unlimited vacation time: 4%

*Opportunities to travel: 4%

*Child care: 0.5%

“It’s a job seeker’s economy, and that means employers have greater incentive to provide additional benefits, especially if they are already offering competitive wages,” Express CEO Bill Stoller said. “Flexibility seems to be the priority for today’s employees, and benefits that help provide that flexibility — from days off and remote work to child care or continued learning — are likely to be well-received.”

The survey of business leaders was fielded in April and included 739 participants.

Global CEO confidence edged down in the 2nd quarter, according to The Conference Board. Its measure of CEO confidence decreased to a level of 63, from 65 in the 1st quarter.

A reading of more than 50 reflects more positive responses than negative ones.

“CEO Confidence declined slightly in Q2, but overall sentiment remains positive,” said Lynn Franco, director of economic indicators at The Conference Board. “CEOs’ optimism regarding the growth prospects for both mature and emerging economies have eased considerably since the beginning of the year. However, most CEOs expect profits will increase over the coming year, with market/demand growth and cost reductions the major driving forces.”

CEOs’ assessment of current economic conditions was about the same as in the first quarter of 2018, with 74% reporting conditions are better compared to six months ago. CEO sentiment was also virtually unchanged regarding the assessment of current conditions in their own industries, with about 51% reporting conditions are better than six months ago.

Looking ahead, however, CEOs’ expectations regarding the economic outlook are much less optimistic than last quarter. Now, just 48% expect economic conditions to improve over the next six months, down from 63% in the 2nd quarter.

CEOs’ assessment of current conditions in the US retreated slightly, but overall remains positive. Sentiment regarding Europe and Brazil declined sharply, with confidence regarding current conditions in Europe going from positive to neutral. In Brazil, sentiment went from positive to negative. Sentiment regarding India declined, although to a lesser extent, and remains cautiously positive. CEOs’ assessment of China and Japan remained about the same as in the first quarter.

Looking forward, CEOs are the most optimistic about short-term prospects for the US, though less so than in the 1st quarter of this year. Expectations for Europe declined from positive to neutral, while expectations regarding China, Japan and India are neutral to slightly positive. Expectations for Brazil, however, have turned slightly negative.

CyberCoders Releases the 10 Most In-Demand Tech Jobs & Salaries

Business Wire, May 16, 2018

CyberCoders, a leading worldwide recruiting firm, today reveals the 10 hottest jobs and salaries in the information technology industry. With workloads increasing tech companies are struggling to fill new positions at an exponential rate. In 2018, the proprietary data shows that the most in-demand tech position is graphic designer, with an average salary of $71,929, followed by team lead at $130,745 and systems engineer with an average salary of $107,127.

“The CyberCoders data shows that the demand for top tech jobs like graphic designers and team leads is high, with an 8% year over year growth increase for graphic designers alone. It’s no surprise that companies are hiring for top tech positions at a rapidly growing rate, and we don’t expect to see this demand slow down any time soon,” says President of CyberCoders Shane Lamb.

The Most In-Demand Tech Jobs 2018

Title

Salary Average

% Growth Increase

1. Graphic Designer

$71,929

8.01%

2. Team Lead

$130,745

6.52%

3. Systems Engineer

$107,127

5.49%

4. Test Engineer

$92,965

5.07%

5. Security Engineer

$124,868

4.79%

6. Software Developer

$96,105

4.57%

7. Project Manager

$100,063

4.52%

8. Senior Data Engineer

$152,103

4.45%

9. Sales Engineer

$126,227

4.39%

10. Data Analyst

$81,885

4.29%

The CyberCoders data team derived the top 10 hottest jobs and salaries in IT by analyzing over 400,000 data points from CyberCoders proprietary placement and jobs data from 2014-2017.

“Our data takes a unique look at the IT industry over the last 4 years and paints a clear picture of what positions are currently the most in-demand. Having access to these hiring trends allows us to arm our recruiters with all the information they need to be fully prepared to help IT companies hire their best talent yet,” continues Lamb.

The new ADP/Moody’s National Employment Report: Over 78% of all new job growth in July 2018 came from Small and Medium-size Companies!

August 1, 2018

Private sector employment increased by 219,000 jobs from June to July (a 38,000 job increase from June’s upwardly ‘revised’ 181,000*), according to the July ADP National Employment Report®. *The June total of jobs added was revised up from 177,000 to 181,000.

This report is produced by ADP® in collaboration with Moody’s Analytics. The matched sample used to develop the ADP National Employment Report® was derived from ADP payroll data, which represents 411,000 U.S. clients employing nearly 24,000,000 workers in the U.S.

By Company Size

Small businesses: 52,000

1-19 employees 21,000

20-49 employees 31,000

Medium businesses: 119,000

50-499 employees 119,000

Large businesses: 48,000

500-999 employees 24,000

1,000+ employees 24,000

By Sector

Goods-producing: 42,000

Natural resources/mining 3,000

Construction 17,000

Manufacturing 23,000

Service-providing: 177,000

Trade/transportation/utilities 21,000

Information <-1,000>

Financial activities 15,000

Professional/business services 47,000

Professional/technical services 16,000

Management of companies/enterprises 4,000

Administrative/support services 28,000

Education/health services 48,000

Health care/social assistance 49,000

Education <-1,000>

Leisure/hospitality 37,000

Other services 9,000

Franchise Employment

Franchise Jobs 15,100

“The labor market is on a roll with no signs of a slowdown in sight,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Nearly every industry posted strong gains and small business hiring picked up.”

Mark Zandi, chief economist of Moody’s Analytics, said, “The job market is booming, impacted by the deficit-financed tax cuts and increases in government spending. Tariffs have yet to materially impact jobs, but the multinational companies shed jobs last month, signaling the threat.”

(The August 2018 ADP National Employment Report will be released at 8:15 a.m. ET on September 6, 2018.)

Due to the important contribution that small businesses make to economic growth, employment data that is specific to businesses with 49 or fewer employees is reported each month in the ADP Small Business Report®, a subset of the ADP National Employment Report.

June 2018 Small Business Report Highlights

Total Small Business Employment: 52,000 (a 23,000 increase)

●By Size

►1-19 employees

21,000

►20-49 employees

31,000

●By Sector for 1-49 Employees

►Goods Producing

7,000

►Service Producing

45,000

●By Sector for 1-19 Employees

►Goods Producing

4,000

►Service Producing

17,000

●By Sector for 20-49 Employees

►Goods Producing

4,000

►Service Producing

27,000

Bottom-line: To my audience of recruiters, always remember this: Our ‘bread and butter’, especially on the contingency side of the house, has historically been, and continues to be, small and medium-sized client companies. Along with the large companies, these companies need to be in included in your niche!

Job Openings and Labor Turnover Survey – May 2018

July 10, 2018

The number of job openings edged down to 6,600,000 on the last business day of May, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were little changed at 5,800,000 and 5,500,000, respectively. Within separations, the quits rate and the layoffs and discharges rate were little changed at 2.4% and 1.1%, respectively. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by 4 geographic regions.Job Openings On the last business day of May, the job openings level edged down to 6,600,000 from a revised April level of 6,800,000, a series high. The job openings rate was 4.3%. The number of job openings decreased for total private (-228,000) and was little changed for government. Job openings increased in federal government (+12,000) and mining and logging (+10,000) but decreased in information (-60,000) and arts, entertainment, and recreation (-27,000). The number of job openings decreased in the Northeast region. ________________________________________________________________________Errors in JOLTS federal government estimatesBLS identified errors in the JOLTS federal government hires, total separations, and layoffs and discharges estimates from January 2011 forward. These data have been suppressed from the BLS database and this news release.________________________________________________________________________ Hires The number of hires was little changed at 5,800,000 in May. The hires rate was 3.9%. The number of hires was little changed for total private. Hires increased in health care and social assistance (+48,000). The number of hires was little changed in all 4 regions. Separations Total separations includes quits, layoffs and discharges, and other separations. Total separations is referred to as turnover. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, disability, and transfers to other locations of the same firm. The number of total separations was little changed at 5,500,000 in May. The total separations rate was 3.7%. The number of total separations was little changed for total private. Total separations decreased in arts, entertainment, and recreation (-39,000) and state and local government education (-17,000). The number of total separations was little changed in all 4 regions. The number of quits increased in May to 3,600,000 (+212,000). The quits rate was 2.4%. The number of quits rose for total private (+204,000) and was little changed for government. Quits increased in health care and social assistance (+55,000), finance and insurance (+21,000), and transportation, warehousing, and utilities (+20,000). The number of quits increased in the South region. The number of layoffs and discharges was little changed at 1,600,000 in May. The layoffs and discharges rate was 1.1%. The number of layoffs and discharges was little changed for total private. Layoffs and discharges decreased in retail trade (-75,000), arts, entertainment, and recreation (-44,000), and state and local government education (-15,000). The number of layoffs and discharges decreased in the West region. The number of other separations was little changed in May at 320,000. The number of other separations was little changed for total private and decreased for government (-13,000). Other separations decreased in finance and insurance (-19,000), state and local government education (-7,000), and federal government (-4,000). Other separations was little changed in all 4 regions. Net Change in Employment Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising. Over the 12 months ending in May, hires totaled 66,400,000 and separations totaled 63,900,000, yielding a net employment gain of 2,500,000. These totals include workers who may have been hired and separated more than once during the year.­­­­­­­­­­­­­­­­­­­­­­­­­­­_______________________________________________________________________ The Job Openings and Labor Turnover Survey results for June 2018 are scheduled to be released on Tuesday, August 7, 2018 at 10:00 a.m. (EDT).

As we recruiters know, that 6,600,000 number only represents 20% of the jobs currently available in the marketplace. The other 80% of job openings are unpublished and are filled through networking or word of mouth or by using a RECRUITER. So, those 6,600,000 published job openings now become a total of 33,000,000 published AND hidden job orders.

In July there were 6,280,000 unemployed workers. What was the main reason why those workers were unemployed? Two Words: Structural Unemployment. If we can’t figure out how to educate and/or reeducate those 6,280,000 unemployed, then they will keep reappearing each month as a BLS unemployment statistic—as they have. In the meantime, our recruitment marketplace flourishes!

Online Job Ads Decreased 170,800 in July

August 1, 2018

*Increases widespread across virtually all States and MSAs

*Most occupations showed gains over the month

Online advertised vacancies increased 170,800 to 4,651,500 in July, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series,released today. The June Supply/Demand rate stands at 1.46 unemployed for each advertised vacancy, with a total of 2,100,000 more unemployed workers than the number of advertised vacancies. The number of unemployed was approximately 6,600,000 in June.

NOTE: Recently, the HWOL Data Series has experienced a declining trend in the number of online job ads that may not reflect broader trends in the U.S. labor market. Based on changes in how job postings appear online, The Conference Board is reviewing its HWOL methodology to ensure accuracy and alignment with market trends.

OCCUPATIONAL HIGHLIGHTS

*In July, all of the largest 10 online occupational categories posted increases:

Food preparation and service increased 16,300 to 220,900. The supply/demand rate lies at 2.95 i.e. over 2 unemployed job-seekers for every advertised available opening.

(The August 2018 Conference Board Help Wanted OnLine® (HWOL) Data Serieswill be released at 10:00 AM ET on Wednesday, September 5, 2018)

U-6 Update

In July 2018 the regular unemployment rate fell .1% to 3.9% and the broader U-6 measure fell .3% to 7.5%.

The above 7.5% is referred to as the U-6 unemployment rate (found in the monthly BLS Employment Situation Summary, Table A-15; Table A-12 in 2008 and before). It counts not only people without work seeking full-time employment (the more familiar U-3 rate), but also counts “marginally attached workers and those working part-time for economic reasons.” Note that some of these part-time workers counted as employed by U-3 could be working as little as an hour a week. And the “marginally attached workers” include those who have gotten discouraged and stopped looking, but still want to work. The age considered for this calculation is 16 years and over.

Here is a look at the July U-6 numbers for the past 15 years:

July 2017 8.6%

July 2016 9.7%

July 2015 10.4%

July 2014 12.2%

July 2013 13.9%

July 2012 14.9%

July 2011 16.1%

July 2010 16.5%

July 2009 16.4%

July 2008 10.4%

July 2007 8.3%

July 2006 8.5%

July 2005 8.9%

July 2004 9.5%

July 2003 10.3%

The July 2018 BLS Analysis

According to the July 2018 Employment Situation Summary, published by the Bureau of Labor Statistics, a division of the US Department of Labor, the total nonfarm payroll employment rose by 157,000 in July – a decrease of 91,000 from last month’s ‘revised’ 248,000—up from the originally reported 213,000. With the revisions for May and June, employment gains in those two months combined were 59,000 more than previously reported. After revisions, job gains have averaged 224,000 per month over the last 3 months.

The unemployment rate is also published by the BLS. That rate is found by dividing the number of unemployed by the total civilian labor force. On August 3rd, 2018, the BLS published the most recent unemployment rate for July 2018 of 3.9% (actually it is 3.871%, down by .177% from 4.048% in June 2018).

The unemployment rate was determined by dividing the unemployed of 6,280,000

(–down from the month before by 284,000—since July 2017 this number has decreased by 676,000) by the total civilian labor force of 162,245,000 (up by 105,000 from June 2018). Since July 2017, our total civilian labor force has increased by 1,778,000 workers.

(The continuing ‘Strange BLS Math’ saga—after a detour in December 2016 when the BLS {for the first time in years} DECREASED the total Civilian Noninstitutional Population—this month the BLS again increased this total to 257,843,000. This is an increase of 201,000 from last month’s increase of 188,000. In one year’s time, this population has increased by 2,692,000. The Civilian Noninstitutional Population has increased each month—except in December 2016—by…)

Up from June 2018

by

201,000

Up from May 2018

by

188,000

Up from April 2018

by

182,000

Up from March 2018

by

175,000

Up from February 2018

by

163,000

Up from January 2018

by

154,000

Up from December 2017

by

671,000

Up from November 2017

by

160,000

Up from October 2017

by

183,000

Up from September 2017

by

204,000

Up from August 2017

by

205,000

Up from July 2017

by

206,000

Up from June 2017

by

194,000

Up from May 2017

by

173,000

Up from April 2017

by

179,000

Up from March 2017

by

174,000

Up from February 2017

by

168,000

Up from January 2017

by

164,000

Down from December 2016

by

660,000

Up from November 2016

by

202,000

Up from October 2016

by

219,000

Up from September 2016

by

230,000

Up from August 2016

by

237,000

Up from July 2016

by

234,000

Up from June 2016

by

223,000

Up from May 2016

by

223,000

Up from April 2016

by

205,000

Up from March 2016

by

201,000

Up from February 2016

by

191,000

Up from January 2016

by

180,000

Up from December 2015

by

461,000

Up from November 2015

by

189,000

Up from October 2015

by

206,000

Up from September 2015

by

216,000

Up from August 2015

by

229,000

Up from July 2015

by

220,000

Up from June 2015

by

213,000

Up from May 2015

by

208,000

Up from April 2015

by

189,000

Up from March 2015

by

186,000

Up from February 2015

by

191,000

Up from January 2015

by

176,000

Up from December 2014

by

696,000

Up from November 2014

by

143,000

Up from October 2014

by

187,000

Up from September 2014

by

211,000

Up from August 2014

by

217,000

Up from July 2014

by

206,000

Up from June 2014

by

209,000

Up from May 2014

by

192,000

Up from April 2014

by

183,000

Up from March 2014

by

181,000

Up from February 2014

by

173,000

Up from January 2014

by

170,000

Up from December 2013

by

170,000

Up from November 2013

by

178,000

Up from October 2013

by

186,000

Up from September 2013

by

213,000

Up from August 2013

by

209,000

Up from July 2013

by

203,000

Up from June 2013

by

204,000

Up from May 2013

by

189,000

Up from April 2013

by

188,000

Up from March 2013

by

180,000

Up from February 2013

by

167,000

Up from January 2013

by

165,000

Up from December 2012

by

313,000

Up from November 2012

by

176,000

Up from October 2012

by

191,000

Up from September 2012

by

211,000

Up from August 2012

by

206,000

Up from July 2012

by

212,000

Up from June 2012

by

199,000

Up from May 2012

by

189,000

Up from April 2012

by

182,000

Up from March 2012

by

180,000

Up from February 2012

by

169,000

Up from January 2012

by

335,000

Up from December 2011

by

2,020,000

This month the BLS has increased the Civilian Labor Force to 162,245,000 (up from June by 105.000).

Subtract the second number (‘civilian labor force’) from the first number (‘civilian noninstitutional population’) and you get 95,598,000 ‘Not in Labor Force’—up by 96,000 from last month’s 95,502,000. In one year’s time, this NILF population has increased by 914,000. The government tells us that most of these NILFs got discouraged and just gave up looking for a job. My monthly recurring question is: “If that is the case, how do they survive when they don’t earn any money because they don’t have a job? Are they ALL relying on the government to support them??”

This month, our Employment Participation Rate—the population 16 years and older working or seeking work— remained at 62.9%. This is .5% above the historically low rate of 62.4% recorded in September 2015—and, before that, the rate recorded in October 1977—9 months into Jimmy Carter’s presidency—almost 40 years ago!

Final take on these numbers: Fewer people looking for work will always bring down the unemployment rate.

Anyway, back to the point I am trying to make. On the surface, these new unemployment rates are scary, but let’s look a little deeper and consider some other numbers.

The unemployment rate includes all types of workers—construction workers, government workers, etc. We recruiters, on the other hand, mainly place management, professional and related types of workers. That unemployment rate in July was 2.4% (this rate was .1% lower than last month’s 2.5%). Or, you can look at it another way. We usually place people who have college degrees. That unemployment rate in July was 2.2% (this rate was .1% lower than last month’s 2.3%).

Now stay with me a little longer. This gets better. It’s important to understand (and none of the pundits mention this) that the unemployment rate, for many reasons, will never be 0%, no matter how good the economy is. Without boring you any more than I have already, let me add here that Milton Friedman (the renowned Nobel Prize-winning economist), is famous for the theory of the “natural rate of unemployment” (or the term he preferred, NAIRU, which is the acronym for Non-Accelerating Inflation Rate of Unemployment). Basically, this theory states that full employment presupposes an ‘unavoidable and acceptable’ unemployment rate of somewhere between 4-6% with it. Economists often settle on 5%, although the “New Normal Unemployment Rate” has been suggested to fall at 6.7%.

Nevertheless (if you will allow me to apply a ‘macro’ concept to a ‘micro’ issue), if this rate is applied to our main category of Management, Professional and Related types of potential recruits, and/or our other main category of College-Degreed potential recruits, we are well below the 4-6% threshold for full employment…we find no unemployment! None! Zilch! A Big Goose Egg!

THE IMPORTANCE OF GDP

“The economic goal of any nation, as of any individual, is to get the greatest results with the least effort. The whole economic progress of mankind has consisted in getting more production with the same labor…Translated into national terms, this first principle means that our real objective is to maximize production. In doing this, full employment—that is, the absence of involuntary idleness—becomes a necessary by-product. But production is the end, employment merely the means. We cannot continuously have the fullest production without full employment. But we can very easily have full employment without full production.”

—Economics in One Lesson, by Henry Hazlitt, Chapter X, “The Fetish of Full Employment”

On July 27th, the US Bureau of Economic Analysis (BEA) announced the real gross domestic product (GDP) — the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes — increased at an annual rate of 4.1%in the second quarter of 2018, according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter of 2018, real GDP increased 2.2% (revised).

The Bureau emphasized that the 2nd quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The “second” estimate for the second quarter, based on more complete data, will be released on August 29, 2018.

The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

The acceleration in real GDP growth in the second quarter reflected accelerations in PCE and in exports, a smaller decrease in residential fixed investment, and accelerations in federal government spending and in state and local spending. These movements were partly offset by a downturn in private inventory investment and a deceleration in nonresidential fixed investment. Imports decelerated.

Updates for the first quarter of 2018

For the first quarter of 2018, real GDP is now estimated to have increased 2.2%; in the previously published estimates, 1st quarter GDP was estimated to have increased 2.0%. The 0.2% upward revision to the percent change in 1st quarter real GDP primarily reflected upward revisions to private inventory investment, nonresidential fixed investment, and federal government spending that were partly offset by downward revisions to PCE and residential fixed investment. Imports were revised down.

Three Update Releases to GDP BEA releases 3 vintages of the current quarterly estimate for GDP: “Advance” estimates are released near the end of the first month following the end of the quarter and are based on source data that are incomplete or subject to further revision by the source agency; “second” and “third” estimates are released near the end of the second and third months, respectively, and are based on more detailed and more comprehensive data as they become available. Annual and comprehensive updates are typically released in late July. Annual updates generally cover at least the 5 most recent calendar years (and their associated quarters) and incorporate newly available major annual source data as well as some changes in methods and definitions to improve the accounts. Comprehensive (or benchmark) updates are carried out at about 5-year intervals and incorporate major periodic source data, as well as major conceptual improvements. (Second Quarter 2018 “Second” Estimate will be released on August 29, 2018)

IT IS IMPOSSIBLE FOR UNEMPLOYMENT EVER TO BE ZERO

‘Unemployment’ is an emotional ‘trigger’ word…a ‘third rail’, if you will. It conjures up negative thoughts. But it is important to realize that, while we want everyone who wants a job to have the opportunity to work, unemployment can never be zero and, in fact, can be disruptive to an economy if it gets too close to zero. Very low unemployment can actually hurt the economy by creating an upward pressure on wages which invariably leads to higher production costs and prices. This can lead to inflation. The lowest the unemployment rate has been in the US was 2.5%. That was in May and June 1953 when the economy overheated due to the Korean War. When this bubble burst, it kicked off the Recession of 1953. A healthy economy will always include some percentage of unemployment.

There are five main sources of unemployment:

Cyclical (or demand-deficient) unemployment – This type of unemployment fluctuates with the business cycle. It rises during a recession and falls during the subsequent recovery. Workers who are most affected by this type of unemployment are laid off during a recession when production volumes fall, and companies use lay-offs as the easiest way to reduce costs. These workers are usually rehired, some months later, when the economy improves.

Frictional unemployment – This comes from the normal turnover in the labor force. This is where new workers are entering the workforce and older workers are retiring and leaving vacancies to be filled by the new workers or those re-entering the workforce. This category includes workers who are between jobs.

Structural unemployment – This happens when the skills possessed by the unemployed worker don’t match the requirements of the opening—whether those be in characteristics and skills or in location. This can come from new technology or foreign competition (e.g., foreign outsourcing). This type of unemployment usually lasts longer than frictional unemployment because retraining, and sometimes relocation, is involved. Occasionally jobs in this category can just disappear overseas.

Seasonal unemployment – This happens when the workforce is affected by the climate or time of year. Construction workers and agricultural workers aren’t needed as much during the winter season because of the inclement weather. On the other hand, retail workers experience an increase in hiring shortly before, and during, the holiday season, but can be laid off shortly thereafter.

Surplus unemployment – This is caused by minimum wage laws and unions. When wages are set at a higher level, unemployment can often result. Why? To keep within the same payroll budget, the company must let go of some workers to pay the remaining workers a higher salary.

Other factors influencing the unemployment rate:

Length of unemployment – Some studies indicate that an important factor influencing a worker’s decision to accept a new job is directly related to the length of the unemployment benefit they are receiving. Currently, in 2018, workers in most states are eligible for up to 26 weeks of benefits from the regular state-funded unemployment compensation program. Studies suggest that additional weeks of benefits reduce the incentive of the unemployed to seek and accept less desirable jobs.

Changes in GDP – Since hiring workers takes time, the improvement in the unemployment rate usually lags the improvement in the GDP.

WHERE RECRUITERS PLACE

Now back to the issue at hand, namely the recruiting, and placing, of professionals and those with college degrees.

If you look at the past few years of unemployment in the July “management, professional and related” types of worker category, you will find the following rates:

July 2017 2.7%

July 2016 3.0%

July 2015 3.1%

July 2014 3.5%

July 2013 4.1%

July 2012 4.8%

July 2011 5.0%

July 2010 5.0%

July 2009 5.5%

July 2008 2.9%

July 2007 2.5%

July 2006 2.5%

July 2005 2.7%

July 2004 3.1%

July 2003 3.7%

July 2002 3.5%

July 2001 2.2%

July 2000 1.8%

Here are the rates, during those same time periods, for “college-degreed” workers:

July 2017 2.4%

July 2016 2.5%

July 2015 2.5%

July 2014 3.1%

July 2013 3.8%

July 2012 4.1%

July 2011 4.3%

July 2010 4.5%

July 2009 4.7%

July 2008 2.5%

July 2007 2.1%

July 2006 2.1%

July 2005 2.4%

July 2004 2.7%

July 2003 3.1%

July 2002 3.0%

July 2001 2.2%

July 2000 1.7%

The July 2018 rates for these two categories, 2.4% and 2.2%, respectively, are very low again this month and are at, or close to, the halcyon numbers we attained in the 2006-2007 & 2000-2001 time frames. But regardless, these unemployment numbers usually include a good number of job hoppers, job shoppers and rejects. We, on the other hand, are engaged by our client companies to find those candidates who are happy, well-appreciated, making good money and currently working and we entice them to move for even better opportunities—especially where new technologies are expanding. This will never change. And that is why, no matter the overall unemployment rate, we still need to MARKET to find the best possible job orders to work and we still need to RECRUIT to find the best possible candidates for those Job Orders.